B0ycey wrote:But there have been historical events to say that "money printing" causes inflation and as such MMT is wrong... or not wrong actually, but will suffer from contradictions and assertions which is true with MSc as well I guess.
Also, we are running the economy on MSc economics, so the mere fact the economy is stuttering along and hasn't failed means there isn't a link to say their assertions are wrong. Or I should say your original points which are not assertions and are in fact not shared by MSc economists anyway and are in fact points you made that no one claimed ever but I guess are based on principles or practices. The only point that barely has some truth to it was point three in which banks operate on a fractional reserve and although we have had the argument that Banks create new money on PoFo before, what people ignore is loans are assets and should they be defaulted on they then become toxic and have the potential to take a bank down if enough people do so and as such they aren't really new money actually and are in fact an asset which brings money back into the system.
But to get back onto MMT, or more specifically the claim "that nobody says much at all", it is difficult to explain that MMT is wrong when you seem to ignore Weimar, Zimbabwe, Argentina and the 70s as examples and primarily look at the US borrowing in specifically today for your assertions. Without going into detail on the Petrol Dollar, that the Dollar being the global reserve currency, countries using the Dollar as their main currency, Chinese and Japanese holdings and that commodity exchange and deals specifically are exchanged in Dollars, all I will say is the US specifically has been in a fortunate position since Bretton Woods due to there being a huge demand for Dollars and as such the US has been able to borrow more than anyone else but this borrowing isn't without risk and should demand for Dollars fall, it may well cause hyper inflation actually due to an increased supply of dollars into the market and a lower demand for them. And in laymen that is basically saying that "Money Printing" has a limit and that the US may have exceeded that limit but the way the global economy works means you need Dollars to exchange to do business which clouds a contradiction that MMT has.
Also it needs to be said that we have seen inflation since Covid19 and currently that inflation has eased slightly the past few months and perhaps that may well be because people aren't spending yet to the levels we had pre Covid so please don't be over confident that we have seen the worse of this yet.
In no particular order ---
1] I have pointed to Japan as an example of a nation that has been borrowing a lot (now over 256.22% of its GDP in 2020) for 28 or 29 years now and 45% of its bonds are currently held by the Bank of Japan. This is more like printing money than selling bonds to the public to fund the deficit. Is Japan in trouble yet? No? Why not?
2] All of the examples of history are from the time when the world was on the gold standard, or involved a shortage of foreign currency, or food or oil that had to be bought with foreign currency. Also, Greece uses the euro and so doesn't issue its own money. None of the cases would apply today to nations like UK, US, Canada. Aust., NZ, Japan, etc. The world changed in 1971. MS econ. ignores this year that changed the world. It never mentions it, because it wants to ignore the effects of this.
3] Yes, the US is special. The US$ is the worlds reserve currency. However, as of now there is no nation that can compete with the US. And this will not change in the next 20 years, during which time ACC will devastate the world as it is already starting to do. After ACC has peaked all bets are off.
. . . a] China can't be trusted and has currency controls in place.
. . . b] Russia can't be trusted.
. . . c] Germany is in the EU & EZ and uses the euro. Also, it doesn't sell many bonds in any year. So its bonds can't be enough to meet the world demand.
. . . d] The UK, maybe, but I think not. At least it is out of the EU. But, it doesn't want to run large deficits.
. . . e] All other nations are just too small.
4] I didn't make up any of my assertions. Everyone was lifted from others. For example, in the last week or so I saw a youtube video and I think I posted a link here to it somewhere. In it they asserted that MS econ. does exclude from consideration all thoughts about the Earth setting limits like the 2 I mentioned. The fact that you have not seen a MS source say those things is not really evidence that it hasn't said them.
5] Bank loans create cash and the asset you mentioned. As such they have no net effect on net worth, but they do add to incomes in the here and now. I have explained the process a few times here. Yes, I'm not an expert and so may not be believed or may even get some points wrong. Yet, nobody has said that I am wrong in my explanations of how bank loans cause many recessions.
6] Of course the economy is sputtering along. How can it fail? What would you see as a failure? I think that you don't grok my point. My point is that all predictions made by MS economists have failed to come true. Over a year ago I asked anyone here to find one prediction that did come true. No one did. Oh, 3 claimed they did, but none was made by a MS economist. Prof. Steve Keen is not MS. I can point to several predictions that MMTers claim to have made in print, that did come true. So, in 40 years of Neo-liberal MS econ. not one true prediction, but about 5 in 25 years for MMTers. 5 to 0 is a good batting average.
. . . If you want to you can find one prediction by a MS econ., and I'll look at it and see if it is a good example. I'm open to this and I'm honest, and I will admit I'm wrong. If you can find 1 good example. So, far this year we have seen many predictions of high inflation turning to hyperinflation and none have come true yet.
. . . So, did any economists predict the GFC/2008? Yes. Steve Keen did and so did 1 MMTer. Did any MS economist predict it? I've not heard of any. They were all claiming that such a crash was a thing of the past.
7] Did you ever look up or read the report that I have mentioned 3 times by the conservative respected MS econ. Cato Institute about the examples of hyperinflation in history? It found 47 IIRC examples, and all were after 1900. All your examples were in the list. However, in every case the cause was not too much money, instead it was shortages of food, oil, or foreign currency. For example, the one in Weimar Ger. was caused by Ger. being unable to pay the reparations in the treaty in the required gold, Francs, or Pounds. So, it tried to buy gold with printed money and didn't stop when the inflation started. All they had to do was stop printing money to buy gold. Of course France and Great Britain would have punished Ger. for that.
. . . Zimbabwe was caused by the Gov. doing land reform that gave the land to soldiers who didn't know how to farm. The resulting crop failure caused a need to buy food from overseas. So, it printed money and this caused the inflation. The shortage always comes 1st, and then the response is to print money. Try finding the Cato Institute report and reading it. Then get back to me about this point. If you can't find it maybe I can, but I'm not as computer savvy as you are.